FTSE 100 continues to push towards new record, Sainsbury’s joins the rapid delivery movement and Marks & Spencer to open 20 new stores

“Like a sturdy old thoroughbred clearing hurdle after hurdle the FTSE 100 continues to press on towards a new record level despite the uncertain backdrop,” says AJ Bell Investment Director Russ Mould.

“Asia-focused insurer Prudential was among the gainers as shares in China and other markets in the regions, bar Japan, enjoyed gains. Some of the usual direction provided to UK stocks by Wall Street will be absent today as the US marks Martin Luther King Day.

“Chinese GDP figures are out in the early hours of Tuesday morning, and they should reveal how badly scarred its economy has been by Covid lockdowns, restrictions and surging cases as the country started to open up in the final three months of 2022.

“Bank of England Governor Andrew Bailey is set to speak before MPs on Monday afternoon with investors looking for any clues on the future direction of interest rates. Later this week UK inflation figures will provide further insight into the likely trajectory of rates, with US retail sales for December another key number the market will be keeping tabs on.”

Sainsbury's

“Supermarkets continue to look for new ways to shift products and rapid delivery has been on the menu for many players in recent years. Always trying to do one better than its rivals, Sainsbury’s is now launching same-day delivery in less than 30 minutes – effectively twice as fast as Tesco’s Whoosh service.

“Using Just Eat’s network of delivery drivers, the service will initially focus on large cities. It’s targeting people who are either time poor or just can’t be bothered to walk up to their nearest convenience store.

“While there is a market for this service, plenty of other supermarkets are already offering the same thing including the Co-op. Morrisons even aspires to have its products delivered within 15 to 20 minutes so Sainsbury’s can’t even lay claim to being the fastest.

“For all the supermarkets, using a third-party delivery service makes life easier but it still takes time for staff to pick the products from the shelf. If someone is only ordering a pint of milk and a loaf of bread, is that really the best use of the supermarket worker’s time walking around the store filling small bags?

“Sainsbury’s might argue that not being part of the rapid delivery movement puts it at a disadvantage so it cannot afford to stay on the sidelines.”

Marks & Spencer

“The retail environment is not exactly buoyant right now so it feels significant that Marks & Spencer has revealed an investment worth hundreds of millions of pounds to open 20 new stores. The company had already announced plans to close a large number of shops last October so on a net basis its presence in retail parks and on the high street will be reduced.

“However, it demonstrates physical retail continues to have a role and that Marks & Spencer sees its multi-format stores, with a mix of clothing, homewares and food, as a competitive advantage.

“The push to revamp the store estate also shows it recognises the importance of having sites which are appealing for shoppers to visit and are in the right places to attract healthy footfall.

“Coming off the back of the group’s better-than-expected Christmas trading, it seems Marks & Spencer has rediscovered its mojo. Whether it can maintain the momentum as the headwinds provided by rising costs and increased pressures on household budgets continue to bear down on the business is the key test facing management.”

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